Real estate can be big business—especially in California. Even as the retail industry is on a downward turn, property can turn a really nice profit. Purchasing property and fixing it up to resell can be lucrative and rewarding. All it takes is initial Orange County real estate investment capital.
How Do I Get That Capital?
Unless you're already swimming in money, acquiring the funds to purchase property can be a trial. While banks offer loans, you have to have a sparkling credit report in order for them to approve you. For people who don't have good credit, there are still opportunities to get the needed money.
One option is to look at a Los Angeles private money lender. An LA money lender won't look at your credit history. What they want is collateral. If you have property to put up as collateral, you can secure a hard money loan.
What are Hard Money Loans for Real Estate Investors?
A hard money loan is an agreement where the private money lender will give you the needed money and, if you fail to pay back the loan, they'll take ownership of the property you put up for collateral.
What Does a Successful Hard Money Loan Look Like?
Before you leap into acquiring a loan of hard money in Los Angeles, CA, it is crucial to realize what will happen.
- You find a property you want to purchase.
Be smart with this selection. Understand the market so you can anticipate how long it will take to fix the property up and what you can realistically sell it for.
- Approach a good Los Angeles hard money lender
Do your research on possible lenders; only do business with businesses with a good Better Business Bureau rating. And make sure they are properly licensed.
- Request a loan.
Several things will go into this process. The hard money lender will want to know details like when you will want to pay the loan back, what your plan is for paying the loan, and, most importantly, what the property is you'll put up as collateral. Expect to only receive 50 – 70 percent of what your property is worth. That way if you default, they can easily sell the property to make their money.
- Understand All the Conditions for the Loan
Understand the time frame for repayment, any monthly interest fees, and any other issues that could result in defaulting and, thus, losing your collateral.
- When you have the money, purchase the property.
Don't forget to leave some money for repairs. The property won't do you any good if you can't afford the necessary repairs needed to properly boost the value.
- After doing the repairs, resell the property.
This is the key step. Because of the time restraint in repaying your loan, you can't afford to sit on the property for long. Flip the property, make your money, and repay your loan!